The Jenkins Organization came to SpareFoot for more leads to fill its growing portfolio of storage facilities. Their online customers were typically more price-sensitive than walk-ins. But they’ve found SpareFoot sends a different type of customer—one who is more focused on quality, location and other features TJO boasts. With SpareFoot’s integrated online marketing platform, they’re able to not only charge their highest rates, but continually raise them to outpace larger REITs.
The Goal
The Jenkins Organization wanted to substantially outpace its larger REIT competitors in online customer generation and retention—without lowering prices to do so.
The Results
Reviews on SpareFoot
SpareFoot tenants who moved in
Revenue generated from SpareFoot
Reservations sent by SpareFoot
The Challenge
Many storage companies offer low introductory rates to attract price-sensitive customers on the internet, which has the effect of reducing margins on
an ongoing basis. TJO was already successfully raising rent for existing customers - by up to 10 percent every nine months, depending on the occupancy of the facility - but wanted to get new tenants from the internet in the door at higher rates to begin with.
The Solution
TJO began working with SpareFoot in June 2010. Partnering with SpareFoot has helped TJO increase its occupancy through online exposure on SpareFoot’s extensive partner network. Because SpareFoot uses a pay-for-performance model, TJO only pays for leads that actually convert to rentals and move in to its facilities. SpareFoot makes it easy for TJO to see how much their new tenants cost to acquire, as well as how much money those customers pay TJO over the course of their tenancy.
For starters, they don’t lower their prices. “Contrary to certain beliefs in the marketplace, I am closing 60 percent of my leads on SpareFoot at the highest rental rate we offer instead of a reduced rate,” Manes said. “We add SpareFoot to all of our new properties because I believe it increases my chances of more exposure online at a higher rental rate.” Manes favors a high-low retail merchandising strategy to show a base price crossed out, with a lower price displayed below each price. On his SpareFoot listings, he’s able to experiment with setting larger gaps to charge a higher price for online rentals versus walk-in rentals.
Beyond not lowering prices, TJO can actually raise rents. As an operator focused on revenue management, TJO has found their current customer rent increases result in move-out rates of 7.2 percent—nearly identical to the rate if prices stayed constant, Manes pointed out. This data gives him confidence in the company’s self-storage marketing strategy with SpareFoot and beyond, and helps TJO outpace larger REITs in their areas.
They show full prices on SpareFoot, get new tenants, keep them longer and raise rents regularly over time. Since SpareFoot sends TJO the best possible customers, they are able to significantly outperform much larger operators.
“We don’t look at what the REITs are getting - three to six percent year over year - and say ‘that’s good, that’s what we want.’ No, we want to crush that number,” Manes said. With a little help from SpareFoot, that’s exactly what they’re doing.
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The Client
John Manes is chief operating officer of The Jenkins Organization, a real estate company that owns and manages self-storage properties. TJO has more than 3.5 million square feet of storage space and 21,000+ tenants in Texas, Oklahoma and Louisiana.
The Market
City: Houston, TX
Population: 2,099,451
Total facilities: 500
Number of REIT-owned facilities: 135
The Facility
Owned by: The Jenkins Organization
Years in business: 25
Account: The Jenkins Organization
Number of facilities on SpareFoot: 42
We don’t look at what the REITs are getting - three to six percent year over year - and say ‘that’s good, that’s what we want.’ No, we want to crush that number.
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